Tips for financing a boat in the recovering economy

Arlene Satchell, Sun Sentinel

From small vessels to megayachts, several South Florida boat dealers say they've seen stronger sales this year as the economy improves.

Increased attendance from prospective buyers at earlier boat shows in West Palm Beach and Miami also signal a renewed interest in boat ownership and a loosening of purse strings for big ticket purchases.

In South Florida, sales of new recreational boats 15 feet or more in length climbed 13.8 percent to 3,803 units for the 12 months ending in August, compared with 3,341 in the 2011-12 period, according to data from Miami-based industry tracker Info-Link Technologies, Inc.

"We've seen a very welcomed spark in demand for boat loans and hope it'll continue to rise," said Phillip Bartholomew, of Fort Lauderdale-based Seacoast Marine Finance, a boat show exhibitor that specializes in loans for customers buying boats ranging in price from $150,000 to $8 million.

In Pompano Beach, Elite Financial is seeing similar trends.

"Our boat loan business is about twice as good as last year and the best we've seen in the last five years since the recession," said president Allan Baum, another boat show participant.

Baum is securing financing for bigger loan amounts, too.

So if you're in the market for a boat and plan to shop at this year's show, lending experts say, it's best to do some research before heading out.

Here are some tips to consider:

Research your boat type and model: Comparison shop on the Internet for the boat types, makes and models that best suit your interests and budget to get an idea of basic cost of vessels.

Explore full costs of ownership: The price tag of the boat isn't the only expense. Other costs such as insurance, maintenance, storage or dockage fees and even gasoline must be factored in when considering boat ownership.

Financing: Funding is readily available for qualified potential buyers with a credit score of 700 and higher, but options also exist for those with "not so good credit," Baum said. And "aggressive" interest rates range between 3.75 percent and 4.5 percent. However, to be approved for a marine loan in this market, it takes full documentation and good credit history, good income and positive cash flow, Bartholomew said. Some key documents typically reviewed by lenders to determine loan eligibility are credit reports and income tax returns, he noted.

Ask about loan fees: Securing a boat loan will likely include extra charges such as closing costs, appraisal, processing and underwriting fees as well as other finance-related fees, so be sure to ask during the application process to avoid any surprises.

Pre-qualify for a loan: Buyers who get pre-approved before attending the boat show can make offers on boats as if they were cash deals. The process can take less than 36 hours for qualified applicants, Baum said.